Reading International Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 20, 2025
Skip to Participants
Andrzej Matyczynski
Andrzej Matyczynski
Executive Vice President of Global Operations at Reading International

First Quarter twenty twenty five Earnings Call Conference Call. Thank you for joining Reading International's Earnings Call to discuss our twenty twenty five first quarter. My name is Andrei Matachinsky, and I am Reading's executive vice president of global operations. With me are Ellen Cotter, our president and chief executive officer, and Gilbert Ibanez, our executive vice president, chief financial officer, and treasurer. Before we begin the substance of the call, I will run through the usual caveats.

Andrzej Matyczynski
Andrzej Matyczynski
Executive Vice President of Global Operations at Reading International

In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, certain matters that will be addressed in this earnings call may constitute forward looking statements. Such statements are subject to risks, uncertainties, and other factors that may cause our actual performance to be materially different from the performance indicated or implied by such statements. Such risk factors are clearly set out in our SEC filings. We undertake no obligation to publicly update or revise any forward looking statements. In addition, we will discuss non GAAP financial measures on this call.

Andrzej Matyczynski
Andrzej Matyczynski
Executive Vice President of Global Operations at Reading International

Reconciliations and definitions of non GAAP financial measures, which are segment operating income, EBITDA and adjusted EBITDA are included in our recently issued twenty twenty five first quarter earnings release released on May 15 on our company's website. We have adjusted where applicable the EBITDA items we believe to be external to our business and not reflective of our cost of doing business or results of operations. Such costs could include legal expenses relating to extraordinary litigation and any other items that we can consider to be nonrecurring in accordance with the two year SEC requirement for determining whether an item is nonrecurring, infrequent, or unusual in nature. We believe that the adjusted EBITDA is an important supplemental measure of our performance. In today's call, we also use an industry accepted financial measure called theater level cash flow, TLCF, which is theater level revenue less direct theater level expenses.

Andrzej Matyczynski
Andrzej Matyczynski
Executive Vice President of Global Operations at Reading International

Average ticket price, ATP, which is calculated by dividing cinema box office revenue by the number of cinema admissions, is also used as an accepted industry acronym. We also use a measure referred to as food and beverage spend per patron, FMBSBP, which is a key performance indicator for our cinemas. The FMBSBP is calculated by dividing a cinema's revenues generated by food and beverage sales by the number of admissions at that cinema. Please note that our comments are necessarily summary in nature, and anything we say is qualified by the more detailed disclosure set forth in our form 10 q and other filings with the US Securities and Exchange Commission. I would also like to mention that we are presenting this coming Thursday at the Sidoti Virtual Microcap Conference.

Andrzej Matyczynski
Andrzej Matyczynski
Executive Vice President of Global Operations at Reading International

We will post the presentation deck on the investor relations section of our website at www.reddingrdi.com. So with that behind us, I'll turn it over to Ellen who will review our twenty twenty five first quarter results and discuss our business strategy going forward, followed by Gilbert, who will provide a more detailed financial review. Ellen?

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Thanks, Andre. Welcome everyone to the call today, and thanks for listening in. Let's start with some significant events that occurred during the first quarter of twenty twenty five and over the early part of the second quarter of twenty twenty five. On 01/31/2025, we completed the sale of our assets in Wellington, New Zealand for 38,000,000 New Zealand dollars. Recall that we put these assets up for sale following the unexpected termination of the sale leaseback deal we were working on with the Wellington City Council, which deal would have provided funding to cover our predevelopment and carrying costs.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

As a result of the sale of these assets, we did eliminate NZ18.8 million dollars of debt with Westpac and NZD6.1 million of Bank of America debt and reduced our overall annual interest expense and holding costs. As part of the sale transaction, we entered into an agreement to lease for a Reading Cinema space in the Courtenay Central Building, which historically or before closed in 2019 for seismic reasons was one of our global circuits best performing cinemas and one of the best performing movie theaters in all of New Zealand. The buyer of our Wellington assets, the Prime Property Group, is actively working on redeveloping and seismically upgrading the building and will likely hand over our cinema tendency early next year. As the cinema industry continues to strengthen, we anticipate reopening this theater in late twenty twenty six, early '20 '20 '7. And our goal is to relaunch with the best cinematic experience in New Zealand.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

We've been working with the buyer on the sale of our Cannon Park assets in Townsville, Australia for the last few months. We have an unconditional contract for 32,000,000 Australian dollars expected to close 05/21/2025 Australian time. If the buyer doesn't close, we have the option of terminating the contract, keeping the 1,600,000.0 Australian dollar deposit and remarketing the property, which is a terrific asset reflecting a strong yield in a now decreasing interest rate environment in Australia. Whichever way we go, we'll be retaining our Reading Cinema at this location, which has also historically been a strong performer. Assuming the sale closes with the net proceeds of the sale, we expect to pay down 21,500,000.0 Australian dollars in debt to National Australia Bank along with more limited pay downs to other select lenders.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

From an operational perspective, at $40,200,000 our Q1 twenty twenty five global total revenue was 11% lower than Q1 twenty twenty four. This result was principally due to first, a weaker box office due to the lingering impacts of the twenty twenty three Hollywood strikes and the underperformance of expected tent poles like Disney's Snow White, which was no match for Dune Part two, which was released in March of twenty twenty four. As it's been widely reported, the weak box office impacted each of the industries where we do business. Second, as we streamline our operations, our first quarter twenty twenty five revenue reduced versus first quarter twenty twenty four due to the closure of two underperforming cinemas with a total of eight screens. Third, during the first quarter of twenty twenty five, our revenues were negatively impacted by foreign exchange.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Both the Australian and New Zealand dollar average exchange rates weakened against the U. S. Dollar by four point five percent and seven point three percent respectively compared to the first quarter of twenty four. Recall that historically about 50% of our total revenue has been generated internationally in Australia and New Zealand. And though our top line didn't deliver, our Q1 twenty twenty five global operating loss of $6,900,000 decreased 8.5% from the global operating loss in Q1 twenty twenty four.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

And that result was driven by more efficient cinema operations, including the elimination of loss generating cinemas, lower depreciation and amortization and lower G and A expense. If you're reviewing the trajectory of our operations since the pandemic, you'll see that this operating loss represented the best first quarter result for this metric since Q1 twenty nineteen. During Q1 twenty twenty five, we delivered positive EBITDA of $2,900,000 which increased over 173 from a negative EBITDA of $4,000,000 in the first quarter of twenty twenty four. This result reflects both the gain on sale of our Wellington assets and the cost cutting efforts by the management team implemented over the last year. A positive 2,900,000 EBITDA represents the best first quarter EBITDA since Q1 twenty twenty one.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

And recall that that strong EBITDA for the first quarter of twenty twenty one was driven by sizable net sales proceeds from the sale of our Manacao and Coachello land assets. The sale of Wellington produced a net book profit of approximately $6,600,000 compared to an aggregate net profit of approximately $47,300,000 from the Manukau and Coachello land sales. As many of you know, we operate in two industries, cinema and real estate in three countries, The U. S, Australia and New Zealand, with over 90% of our revenues generated from our cinema business. The last five years marked by the pandemic, interest rate hikes, inflation, and the twenty twenty three Hollywood strikes have depressed our cinema business causing us to rely on our real estate assets and our global real estate division to support us through the tough times.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Generally speaking, we preserved our theater business by not only streamlining our existing cinema portfolio through closing, losing theaters, and creating efficiencies, but also monetizing real estate assets that had reached a point where further appreciation other than that driven by inflation was unlikely without material investment of additional capital. We've done this all without any governmental assistance from The US and without diluting our stockholders. In the first quarter of twenty twenty five, we reported global real estate revenue of $4,800,000 which decreased by 2% over the same period in 2024 and our global real estate operating income of $1,600,000 increased 79% over last year's first quarter. The change was primarily due to improved live theater performance, decreased holding expenses, and decreased depreciation, amortization, and G and A expense. As I just mentioned, similar to the rest of the exhibition community, our first quarter twenty twenty five box office disappointed.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

At $36,400,000 our Q1 twenty twenty five global cinema revenue was 12% lower than Q1 twenty twenty four and represented just under 63% of the pre pandemic Q1 twenty nineteen levels. While this wasn't our expectation, it was understandable in light of the quality and quantity of the film slate that was delivered. At $4,500,000 our Q1 twenty twenty five global cinema operating loss increased 7% over the same quarter last year. As we put the first quarter twenty twenty five in the rearview mirror, thankfully, the second quarter twenty twenty five global box office has to date well exceeded expectations. With that, let's take a closer look at our global cinema business.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

As I just mentioned, following the overall industry trend, our first quarter twenty twenty five global cinema revenue and global operating income were disappointing with both metrics lower compared to the same period last year. Our second quarter appears to be telling quite a different story starting with April of twenty five. The April releases of a Minecraft movie and Sinners have wowed moviegoers. This combination of movies has engaged multiple demographics across our markets and has created real cultural events and moments. A Minecraft movie has generated over $930,000,000 globally to date, setting the record for the largest domestic opening for a video game adaptation ever.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Sinners, a completely original movie and another critically acclaimed collaboration from director Ryan Coogler and Michael b Jordan has grossed close to $320,000,000 worldwide to date. In April 2025, each of our cinema divisions delivered substantially better theater level cash flow compared to April of twenty twenty four. And to date in May 2025, each of our cinema divisions is generating substantially better revenue compared to May of twenty four. Both critics and audiences consider Thunderbolts a welcome MCU edition. Final Destination Bloodlines is another hit from Warner Brothers.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

And we're already seeing strong box office out of Australia from The Final Reckoning, which had early shows starting on May 17. And the presales from Lilo and Stitch, which opens in the next few days, are very strong in comparison to other titles. Both the twenty twenty five summer and holiday period upcoming look to be sensational. The slate is exciting, diverse, and promising. Families will come together to watch How to Train Your Dragon four, Pixar's Helio, and Zootopia two from the Walt Disney Animation Studio.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Superhero fans will be entertained by the Fantastic Four First Steps from the MCU and Superman from DC Universe. Huge franchises return, Karate Kid Legends, Jurassic World Rebirth, Wicked for Good, and Avatar Fire and Ash. And audiences will likely embrace the highly anticipated original titles such as f one starring Brad Pitt and directed by Joe Kaczynski and produced by Jerry Bruckheimer, the team that was behind Maverick, and the film One Battle After Another from director Paul Thomas Anderson and starring Leonardo DiCaprio. Our global teams will be poised and ready to take advantage of this box office bonanza. Let me highlight a few of the key strategic initiatives and themes that our teams will be working on through 2025.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Our F and B program will continue to be a main focus. During the first quarter of twenty twenty five, the F and B SPP for our Australian circuit became the highest first quarter in company history. Our Q1 twenty twenty five F and B SPP in both New Zealand and The U. S. Became the second highest first quarter in our history.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

These F and B milestones are powered by a number of different factors, including improvement in the convenience and functionality of our online and app F and B sales with our transaction sizes consistently improving the sale of liquor, beer and wine in our theatres. As of today, excluding joint ventures, 86% of our theatres in Australia are selling liquor, 38% of theaters in New Zealand, and 100% of our U. S. Theaters are selling beer and wine, and all but three are selling liquor, which we're working to change as we speak. Our F and B milestones were also influenced by the continued embrace of movie theme menus in all three of our countries, where we offer our guests fun movie inspired cocktails, food items, and desserts.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Also, the expanding merchandise trend where, especially in The US, we're complementing our guest movie experience with the opportunity to buy movie themed merch. Understanding the price sensitivities that all of our various audiences feel. In The US, we launched a comprehensive weekday discount program, which offers guests daily value driven discounts on select F and B menu items throughout the week as opposed to the weekend. For instance, on Mondays, we offer a mega movie combo. Tuesdays, we offer a BOGO sweet treat and so on.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

We're also driving guests to our theaters through existing loyalty programs and are working to develop new and improved rewards and membership programs. In Australia and New Zealand, we recently revamped and relaunched our free to join Reading rewards program to provide better perks and savings. Today, we have over 325,000 members. In late Q4 twenty twenty four, we also launched our paid loyalty program for both our Reading and Angelica brands. And since launch, we've signed up over 12,000 paid memberships in Australia and New Zealand.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

In The U. S, we have a free to join Angelica membership program with just under 158,000 members for eight theaters. We'll also launch a premium Angelica monthly membership program within the next month or two. We have an existing free to join rewards program in Hawaii that will be rolled into a new free to join and paid membership again within the next couple months. At the same time, we'll roll out the same offer at our US based Reading Cinemas.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Another major effort for our global executives teams has been to work with our landlords to try and recalibrate our occupancy costs to reflect the new economic reality we've been experiencing over the last few years. In our landlord negotiations requesting expense, occupancy expense relief, we highlight that while our attendance hasn't returned to pre pandemic levels, almost all of our operating expenses are up and the fact that we can only drive our ticket and F and B prices so high. Let's talk about our specific U. S. Or our specific cinema divisions.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

The U. S. Cinema division first quarter results. Our U. S.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Cinema revenue decreased by 14 to $18,300,000 compared to last quarter twenty twenty four. Our U. S. Cinema operating loss improved by 8% to a loss of $3,100,000 Since the pandemic, we've closed multiple underperforming U. S.-based cinemas.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Our most recent closures have been our cinema located in Plano, Texas, which closed in June of twenty twenty four and its revenue is consequently included in the first quarter twenty twenty four results and our Reading Cinemas Townsquare located in San Diego, California, which closed on 04/15/2025. We anticipate that these closures will positively impact our future profitability even if they adversely impact the gross revenue line. And focusing on our first quarter F and B SPP of $7.97 It represents the second highest first quarter ever for a US circuit. And at the Angelica in New York City, our team has been working all quarter long in collaboration with Focus Features to launch New York City's First ever film themed cinema takeover with the release of Wes Anderson's The Phoenician Scheme. Starting Thursday, May 29, the Angelica will show The Phoenician Scheme on multiple screens while simultaneously giving moviegoers an exclusive and immersive immersive experience throughout the theater.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

We'll offer set recreations, props, and more, offering great photo ops the guests can engage with. We're also offering Phoenician Schemed themed movie merch designed by our in house team, and our cafe, concession stand, and menus will all be themed to the movie. We just recently put on sale specially priced ticket packages for the Phoenician Scheme experienced and so far we're very pleased with the results. Now let's turn to our cinemas in Australia and New Zealand. Following the first quarter twenty twenty five box office industry trends and compared to the first quarter of twenty twenty four, our Australian cinema revenue decreased 9% to $15,700,000 and our operating loss increased $1,000,000 from an operating loss of $498,000 Our New Zealand cinema revenue decreased 8% to $2,400,000 and our operating loss increased 54% to $353,000 from an operating loss of $231,000 Notable milestones achieved during the first quarter twenty twenty five include the following, which are all in functional currency.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Our first quarter twenty twenty five Australian FNB SPP of $7.83 was the highest first quarter ever for our Australian cinemas and represents a 72% increase from Q1 twenty nineteen. With respect to our New Zealand cinemas, our Q1 twenty twenty five New Zealand FMB SPP of $6.8 was the second highest first quarter ever. Again, like The U. S, we're glad to have the first quarter behind us and we look forward to a very robust box office over the next few months. Next, let's turn to our global real estate business, which on a segment reporting basis includes not only our third party rental income, but also our live theater business in New York City and our intercompany rents.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Let's start with the first quarter twenty twenty five global results. At four point eight million dollars our global real estate total revenues decreased by 2%, while our total operating income of $1,600,000 increased by 79%. Let me point out a few standout first quarter real estate division metrics. Driven by our U. S.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Live theater performance, our overall Q1 real estate operating income of $1,600,000 is the best first quarter ever since Q2 twenty eighteen. That result was delivered despite among other things, the elimination of rental revenue at our Wellington properties in New Zealand in the first quarter of twenty twenty five, our Culver City office building in Q1 twenty twenty four, our Maitland property in New South Wales in the fourth quarter of twenty twenty three and our Auburn Redyard development in June of twenty twenty one, which had seventeen third party tenants. This quarter's operating income was about 38% higher than Q1 twenty nineteen's operating income, which again was despite the elimination of that revenue rental revenue associated with our asset monetizations. Breaking it down by division for the first quarter of twenty twenty five, our U. S.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Real estate business, which includes our two live theaters in New York City, delivered a 7% increase in revenue and 139% increase in operating income. Our Australian real estate business reported a slightly decreased revenue of $3,000,000 but a 6% increase in operating income. Our New Zealand real estate revenue of $243,000 decreased by 33% compared to the first quarter of twenty twenty four and our New Zealand real estate operating loss improved by 53%. With respect to our Australian New Zealand portfolio, as of 03/31/2025, we had seventy one third party tenants in the combined Australian New Zealand real estate portfolio. Our combined third party tenant sales for the quarter from our Australian real estate was $29,700,000 and our third party occupancy rate remained strong at 96.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Now let's touch on our real estate assets in The U. S. We've been advancing sales efforts on our Newbury Yard asset in Williamsport, Pennsylvania, following the recent settlement of some necessary rail track easement issues that allow us now to sell clear title with defined access to the local rail system. Our sales process is taking longer than anticipated as we believe that our best buyer is going to be someone looking for rail yard or a distribution center type property. Today, we're engaging with certain parties about the purchase of the now 23.9 acre site.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

One of our stockholders asked again about the appraised value of Newbury Yard. We don't report unappraised or fair market values of our properties. However, we'll note again that the appraised value of this particular asset is well in excess of what we have reported on as the historic book value. Also recall that there's no mortgage on this or any of our other rail assets. We've also embarked on a detailed review of our other historic rail properties.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

We've retained an outside consultant to assist with the effort and this will be an area of focus for the remainder of 2025. We received questions about our leasing progress at 44 Union Square. Questions were posed about what Reading and George Comfort and Sons are doing differently than CBRE to find tenants for the remaining space at 44 Union Square. I remind everyone that CBRE served as the broker for this property from 2021 through 2023, a challenging period for the New York City real estate market, particularly the office market. And as you know, we're marketing several floors of potential office space.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

What George Comfort has done since it took on the exclusive leasing broker role is to take existing live deals and try to work them to an agreeable place for both landlord and tenant. One deal that George Comfort has shepherded through the last several months is in the nonbinding LOI stage and covers all the remaining rentable space in the building. A draft lease has been provided to the tenants council. If the deal is consummated, we believe it would be a wonderful and unique addition to New York City. However, we can provide absolutely no assurance that it will be completed.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

If the deal is not consummated, we'll present a new path forward for 44 Union Square in August 25 during our next reporting cycle. So that wraps up my report on the most important events over the last few months for Reading. In sum, while the company has endured serious headwinds over the last five years, we focused on preserving our global theaters and have protected our stockholders from dilution through closing non performing theaters, reducing expenses, selling certain real estate assets to significantly reduce our overall debt. While at the same time, our various cinema teams have executed strategic initiatives to grow our revenue and streamline our expenses. And our global real estate teams have worked on establishing a strong base of reliable but dynamic third party tenants.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

As the interest rate environment improves in Australia and New Zealand and hopefully in The U. S. Later this year and the slate of Hollywood movies starts to stabilize, we believe that Reading is poised for a much stronger 2026 and beyond. And on a final note, Margaret and I want to extend our greatest appreciation to the management team and our employees who have continued to work tirelessly to keep the company moving in the right direction, not only over the last five months, but the last five years. Thank you.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

So that wraps it up for me. I'll turn it over to Gilbert.

Gilbert Avanes
Gilbert Avanes
EVP, CFO, and Treasurer at Reading International

Thank you, Ellen. Consolidated revenue for the quarter ended 03/31/2025 decreased by $4,900,000 to $40,200,000 when compared to the first quarter of twenty twenty four as a result of lower attendance in all three countries, partially as a result of the two cinemas we closed in U. S. And New Zealand since Q1 twenty twenty four, along with lower performing titles for our U. S.

Gilbert Avanes
Gilbert Avanes
EVP, CFO, and Treasurer at Reading International

And Australia theatre, which was in part due to the external factors surrounding the release of Disney's Snow White. Slight decreases in property rental revenue in all three countries and the weakening of our Australia, New Zealand foreign exchange rate against the U. S. Dollar, offset by an increase in live theater revenue. Net loss attributable to Reading International Inc.

Gilbert Avanes
Gilbert Avanes
EVP, CFO, and Treasurer at Reading International

For the quarter ended 03/31/2025, decreased by $8,500,000 to a loss of $4,800,000 compared to a loss of $13,200,000 in Q1 twenty twenty four. Q1 '20 '20 '5 basic loss per share decreased by $0.38 to a basic loss per share of $0.21 compared to a basic loss per share of $0.59 for Q1 twenty twenty four. These improved results were primarily due to a gain on sale of assets of $6,500,000 as a result of the sale of Courtenay Central property, lower operating expenses and lower interest expenses compared to the same period in prior year. Our total company depreciation, amortization, impairment and G and A expenses for the quarter ended 03/31/2025 decreased by $1,100,000 to $8,500,000 compared to Q1 twenty twenty four. This decrease was primarily due to decreases in depreciation and amortization as a result of the sale of our Culver property in February 2024 and the sale of Courtenay Central in January 2025 and no depreciation on our held for sale properties.

Gilbert Avanes
Gilbert Avanes
EVP, CFO, and Treasurer at Reading International

Income tax benefit for the quarter ended 03/31/2025 increased by 200,000 to $500,000 compared to Q1 twenty twenty four. The change between 2025 and 2024 is primarily related to a decrease in reserve for valuation allowance in 2025. For the first quarter of twenty twenty five, our adjusted EBITDA income increased by $6,900,000 to an EBITDA income of $2,900,000 for an EBITDA loss of $4,000,000 in Q1 twenty twenty four. Shifting to cash flow for the three months ended 03/31/2025, net cash used in operating activities increased by $4,900,000 to $7,700,000 compared to cash used in three months ended 03/31/2024 of $2,800,000 This was primarily driven by a $4,900,000 decrease in net payable. Cash provided by investing activities during the three months ended 03/31/2025 increased by $10,200,000 to $17,900,000 compared to cash provided in three months ended 03/31/2024 of $7,600,000 This was due to higher proceeds from sale of Courtenay Central property in January 2025 compared to the proceeds from the sale of our Culver City office in February 2024.

Gilbert Avanes
Gilbert Avanes
EVP, CFO, and Treasurer at Reading International

Cash used in financing activities for the three months ended 03/31/2025, increased by $5,600,000 to $16,900,000 compared to the cash used in the three months ended 03/31/2024, of $11,200,000 This was primarily due to higher loan pay downs compared to the same period of 2024. Turning now to our financial position. Total assets on 03/31/2025 were $441,000,000 compared to $471,000,000 on 12/31/2024. This decrease was driven by $6,700,000 decrease in cash and cash equivalent from which we funded our ongoing business operations, dollars 3,900,000.0 decrease in receivables, dollars 14,300,000.0 decrease in land and property held for sale due to the sale of our Courtenay Central property. As of 03/31/2025, our total outstanding borrowings were $186,600,000 compared to $202,700,000 on 12/31/2024.

Gilbert Avanes
Gilbert Avanes
EVP, CFO, and Treasurer at Reading International

Our cash and cash equivalent as of 03/31/2025 were $5,900,000 Further to address the liquidity pressure on our business, we are working with our lenders to amend certain debt facilities, and we have selected certain real estate assets for potential monetization and have listed them for sale. As it has been mentioned, during the first quarter twenty twenty five, we completed the monetization of our Wellington, New Zealand property for NZ38 million dollars The proceeds were used to discharge the Westpac mortgage on the property, and we paid down the Bank of America loan. We recorded a $6,600,000 gain on the sale. During the first quarter of twenty twenty five, we made progress with our lenders on the following financing agreements. On 01/31/2025, we repaid $10,500,000 Westpac loan.

Gilbert Avanes
Gilbert Avanes
EVP, CFO, and Treasurer at Reading International

On January and April 2025, we executed amendments with Bank of America to defer certain principal repayments. On 02/05/2025, we repaid 6,100,000.0 taking the loan balance to $8,700,000 On 02/26/2025, we exercised our option to extend our Valley National debt to 10/01/2025. On 05/02/2025, we extended the maturity date on our Emerald Creek Capital loan from 05/06/2025 to 11/06/2026. The amendments requires two repayments of $500,000 in May 2025 and February of twenty twenty six. As of today, we are contracted to sell our Cannon Park assets in Townsville, Australia for an AUD 32,000,000.

Gilbert Avanes
Gilbert Avanes
EVP, CFO, and Treasurer at Reading International

We intend to use the proceeds of such sales to pay down our debt with NAB and Bank of America. Our lenders are working with us to accommodate the anticipated closing date of 05/21/2025. On 04/29/2025, we executed a further amendment with NAB that extended the repayment of our Australian $20,000,000 bridge loan until 05/14/2025. On 05/14/2025, we received confirmation from NAB that the bridge loan will be further extended until 05/23/2025. Additionally, we're currently working with our lenders to extend the maturity date of the loan on our live theater in New York City.

Gilbert Avanes
Gilbert Avanes
EVP, CFO, and Treasurer at Reading International

With that, I will now turn it over to Andre.

Andrzej Matyczynski
Andrzej Matyczynski
Executive Vice President of Global Operations at Reading International

Thanks, Gilbert. First, I'd like to thank our stockholders for forwarding questions to our Investor Relations email. As usual, in addition to addressing many of your questions in the prepared remarks from Ellen and Gilbert, we selected a few additional questions to offer additional insights from management. The first such question is, what is your cinema CapEx forecast for 2025? What cinema renovation projects are in progress, and what others are planned for start and completion in 2025? Ellen?

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

In The US, during '25, we've got one theater that has plans filed with the city for an upcoming renovation. We're converting 10 auditoriums to recliners and adding a Titan Luxe screen in that theater. In New Zealand, through the rest of 2025, we're working on concepts and plans for the upgrade of our Reading Cinema at Courtenay Central, which will include conversion to recliners, addition of premium experiences, and lobby and F and B upgrades. Right now, we've got four other cinemas currently targeted for upgrades in late twenty twenty five and early twenty twenty six. With respect to those theaters, two in The US, One in Australia, another in New Zealand, we're currently working through capital allocation issues and landlord negotiations.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

So right now, we can offer no assurance that those renovations in those four theaters will be completed, but we'll be able to have a more definitive report for you in the next quarter.

Andrzej Matyczynski
Andrzej Matyczynski
Executive Vice President of Global Operations at Reading International

Thanks, Helen. In the same milk, what are Reading's intermediate term plans to maximize and optimize the value of each of the Minetta Lane post the new Amazon Audible lease, and Orphium seizes sites. What analysis has management performed as to what is likely far higher value from redeveloping these parcels into alternative use versus the revolving door renting Orpheum to live shows with intermittent costly periods of vacancy. Helen?

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Reducing our debt and rebuilding our operational cash flow base are two of our main priorities for 2025. We're continuously reviewing and weighing our assets against those goals. Our current plan for the Moneta and Orpheum is to continue to rely on the after debt service cash flow they've generated for years. We're in the process of renewing our Santander debt and anticipate that the interest rate will be stable over the year ahead. While we're disappointed to see Stomp close in 2023 after a historic thirty year run, the last two calendar quarters, Q4 20 20 four and Q1 twenty twenty five at the Orpheum have delivered cash flow comparable to Q4 twenty nineteen and Q1 twenty twenty when Stomp was on stage.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

While we'd love to have another show, quote, sit down at the Orpheum like Stomp, as we work to find a show that has those unique and long term potentials, we're booking well received, engaging, and profitable shows that appeal principally to our East Village audience. The Jonathan Larson Project and Big Gay Jamboree are perfect examples of such shows. We also believe that the upcoming Ginger Twinsies, an opera by parody of the Parent Trap movie opening in about six weeks will also be a solid booking. And with respect to the Mineta, we've enjoyed our arrangement with Audible over the last eight years and expect it to continue for at least the next few years. Audible continues to deliver strong programming.

Ellen Cotter
President, CEO & Vice Chairman of the Board at Reading International

Their current show, Sexual Misconduct of the Middle Classes, a New York Times critic pick starring Hugh Jackman, represents one of the best shows ever mounted at the Mineta. And creditors starring Liev Shriver, which just earned a New York Times critic pick, looks to be another hit. While focusing on running the theaters and delivering the best product for New Yorkers is our current plan, As with all our assets, that operational plan does not prevent us from reviewing any future opportunity and weighing it against all our other options and conditions at the time.

Andrzej Matyczynski
Andrzej Matyczynski
Executive Vice President of Global Operations at Reading International

Thanks, Ellen. Regarding our debt, the Santander, Lynette Renorfium Theater term loan was only rolled forward for another short duration. Do you expect to refinance this loan with Santander or from another source, and how much will further increase in interest rate is expected to result from the refinancing term sheets you have seen? Gilbert?

Gilbert Avanes
Gilbert Avanes
EVP, CFO, and Treasurer at Reading International

We're in discussion with Santander to extend the existing loan for another year. To be negotiated, the terms of the extension would include a partial pay down over the term of the extension. Also, we expect that the interest rate for the year to be generally within the same range as it is today.

Andrzej Matyczynski
Andrzej Matyczynski
Executive Vice President of Global Operations at Reading International

Thanks, Gilbert. And our final q and a, which I will field the company's presenting this Thursday, May 22 at Sidoti's Virtual Microcrap Conference, as I mentioned up above. In addition to this conference, one of our stockholders asked what additional proactive steps and when will the company take to attract both sell side analysts and buy side investors to the company to obtain a lower cost of capital and higher valuation on its shares. Apart from presenting at the Sidoti conference, the company will also host eight one on one meetings with potential future shareholders over the two day conference. We're also working with our existing analysts to participate in several non deal roadshows over the next two quarters.

Andrzej Matyczynski
Andrzej Matyczynski
Executive Vice President of Global Operations at Reading International

Whilst we maintain contact with potential sell side and buy side analysts, at this point in time, pay for coverage organizations are showing the most interest in our company. And management believes that the cost of such a service taking into account our liquidity needs does not seem to provide the best use of our capital. That marks the conclusion of this, our second conference call of 2025, a year in which we are at the last beginning to see a resurgence of the breadth and depth of the cinematic experience that we aspire to translate into

Executives
    • Andrzej Matyczynski
      Andrzej Matyczynski
      Executive Vice President of Global Operations
    • Gilbert Avanes
      Gilbert Avanes
      EVP, CFO, and Treasurer
Analysts
    • Ellen Cotter
      President, CEO & Vice Chairman of the Board at Reading International
Powered by Quartr

Key Takeaways

  • Reading completed the sale of its Wellington, New Zealand assets for NZD 38 million, eliminating NZD 18.8 million of Westpac debt and NZD 6.1 million of Bank of America debt while securing a new lease for its high-performing Courtenay Central cinema space.
  • The company has an unconditional contract to sell its Cannon Park assets in Townsville, Australia for AUD 32 million, with net proceeds expected to pay down AUD 21.5 million of NAB debt and improve its balance sheet.
  • First-quarter revenue declined 11% year-over-year to USD 40.2 million, driven by lingering Hollywood strike impacts, underperforming tentpoles, closure of underperforming cinemas, and unfavorable FX movements in AUD/NZD.
  • Adjusted EBITDA was positive USD 2.9 million in Q1 2025, up USD 6.9 million from a USD 4 million loss in Q1 2024, marking the best first-quarter EBITDA since 2021.
  • Second-quarter box office has outperformed expectations with strong showings from “Minecraft” and “Sinners,” and the summer/holiday slate—featuring big franchises and originals—is expected to drive further recovery.
AI Generated. May Contain Errors.
Earnings Conference Call
Reading International Q1 2025
00:00 / 00:00

Transcript Sections